Pentair (NYSE:PNR) reported fourth-quarter and full-year 2025 results that management described as record-setting in the period following the company’s 2018 nVent separation, highlighted by continued margin expansion, strong free cash flow generation, and an initial outlook for 2026 calling for mid-single-digit earnings growth.
Fourth-quarter results: sales growth and continued margin expansion
In the fourth quarter, Pentair posted 5% sales growth and its 15th consecutive quarter of margin expansion, according to President and CEO John Stauch. The company reported adjusted operating profit up 9%, with return on sales (ROS) expanding 90 basis points to 24.7%. Adjusted EPS rose 9% to $1.18.
Full-year 2025: record sales, earnings, and free cash flow
For 2025, Pentair reported sales up 2% to $4.18 billion. Fishman said results were driven by growth in Pool and Flow, partially offset by Water Solutions. The company reported adjusted operating income up 10% and ROS up 170 basis points to 25.2%, which management characterized as a record. Adjusted EPS increased 14% to a record $4.92.
The company generated record free cash flow of $748 million, and Stauch said Pentair returned $225 million to shareholders through share repurchases during the year. Incoming CFO Nick Brazis said the company ended 2025 with a healthy leverage ratio of 1.4x and return on invested capital of 16.7%, up from 15.5% in 2024.
Management also highlighted product launches across the portfolio, including the Xcentric Impeller in Flow, PFAS Everpure filtration in Water Solutions, and new Pool offerings including IntelliVibe Lights and IntelliCore Plus. Stauch said both PFAS Everpure filtration and the NEO undercounter ice machine won Kitchen Innovation Awards at the 2025 National Restaurant Association Show.
Segment performance: Flow and Pool growth, Water Solutions decline
Flow: Fourth-quarter Flow sales rose 9% to $394 million. Fishman said commercial and industrial sales were both up 12%, while residential sales increased 4%. Segment income increased 22% and ROS expanded 240 basis points to 22.8%, driven by price, the Hydra-Stop acquisition, and transformation. For the full year, Flow sales increased 3% to $1.55 billion and ROS increased 230 basis points to a record 23.3%.
Water Solutions: Fourth-quarter Water Solutions sales fell 10% to $232 million. Fishman said commercial sales were down 15%, including an 11% impact from the sale of the commercial services business in Q2 2025. Segment income declined 12% to $55 million and ROS decreased 60 basis points to 23.5% due to FX and lower volume. For the full year, Water Solutions sales decreased 6%, segment income was flat, and ROS increased 130 basis points to a record 23.9% as transformation drove productivity.
Pool: Fourth-quarter Pool sales increased 11% to $393 million, driven primarily by price. Segment income rose 11%, though ROS declined 20 basis points to 33.6% as Pentair continued to invest in growth initiatives and faced higher-than-expected inflation in certain metals. For the full year, Pool sales rose 9%, supported by price, volume, and the acquisition of Gulfstream in December 2024. ROS increased 60 basis points to a record 33.8%.
2026 outlook: EPS growth, modest sales increase, and tariff headwinds
Pentair introduced full-year 2026 guidance calling for adjusted EPS of $5.25 to $5.40 (up 7% to 10% year over year), sales growth of approximately 3% to 4%, and adjusted operating income growth of approximately 5% to 8%. Brazis said the company expects about 100 basis points of ROS expansion to approximately 26%, supported by price offsetting inflation and another year of “transformation savings” of about $70 million net of investments.
By segment, Brazis said Pentair expects:
- Flow sales up mid- to high-single digits
- Water Solutions sales approximately flat (with core sales up low single digits)
- Pool sales up approximately 3%
Within the total company outlook, Brazis said Pentair expects full-year volume to be roughly flat, price up 2% to 3%, and FX, acquisitions, and divestitures to be an approximate 50 basis point benefit.
For the first quarter of 2026, the company guided to sales up about 1% to 2% and adjusted EPS of $1.15 to $1.18 (up 4% to 6%). Brazis said Q1 is typically the lowest sales quarter seasonally, and the company expects year-over-year growth to be higher in the second half than the first half of 2026.
On tariffs, Brazis said Pentair experienced roughly $70 million of tariff impact in 2025 and expects about $30 million of incremental tariffs in 2026, primarily in Q1. Management said it believes carryover pricing and mitigation strategies can offset the impact.
Portfolio actions, organizational changes, and capital allocation
Management discussed multiple portfolio and organizational actions. Fishman said the sale of the commercial services business in Q2 and the acquisition of Hydra-Stop in Q3 were intended to sharpen focus on higher-growth and higher-margin businesses.
Stauch also announced that Pentair will combine its residential Flow business with its residential Water Solutions business beginning in Q1 2026. The move is intended to align leadership for North American residential plumbing channels, create operational scale, and drive synergies across factories, sales, and G&A. Stauch said the combined residential businesses form roughly a $1 billion “water quality management” business and that Pentair sees “substantial” margin improvement potential over the next several years.
In capital allocation, Brazis said Pentair repurchased 2.3 million shares for $225 million in 2025 and announced a new $1 billion share repurchase authorization. Stauch said the company intends to continue a balanced approach across dividends, buybacks, and bolt-on acquisitions, citing prior deals like Hydra-Stop and Gulfstream as examples of attractive tuck-in opportunities.
Management repeatedly pointed investors to additional detail expected at the company’s Investor Day on March 4, including updates on long-term strategy, transformation initiatives beyond 2026, and new product and innovation plans.
About Pentair (NYSE:PNR)
Pentair plc (NYSE: PNR) is a global provider of water treatment and fluid management solutions. The company designs, manufactures and sells a broad range of products that move, treat, monitor and control the flow of water and other fluids across residential, commercial, industrial and municipal markets. Pentair’s offerings are focused on improving water quality, conserving resources and enabling efficient fluid handling in applications from household water systems and pools to large-scale industrial and municipal installations.
Product lines include pumps and pumping systems, water filtration and purification equipment, valves and controls, heat exchangers, pool and spa systems, and a range of aftermarket parts and services.
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